W WORKING PAPER 028 – March 2015

Economic Evaluation of Different

Irrigation Systems for Wheat
Production in Rechna Doab,
Pakistan

A. Bakhsh, M. Ashfaq, A. Ali, M. Hussain, G. Rasool,

Z. Haider and R. H. Faraz

Posted: 03/18/2015

i
THE PAKISTAN STRATEGY SUPPORT PROGRAM (PSSP)
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ABOUT THE AUTHORS

A Bakhsh (bakhsh_uaf@yahoo.com)1, M. Ashfaq2, A. Ali2, M. Hussain2, G. Rasool1, Z. Haider1
and R. H. Faraz1
1 Department of Irrigation and Drainage, University of Agriculture, Faisalabad, 38040, Pakistan
2 Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, 38040,

Pakistan

ii
ACKNOWLEDGMENTS
This paper is an output from a project entitled “Enhancing water productivity by using feasible efficient
irrigation techniques” awarded under the PSSP research competitive grants program funded by USAID and
executed by IFPRI and the Planning Commission, Government of Pakistan. We gratefully acknowledge the
financial support and cooperation extended by USAID, IFPRI, Planning Commission, Government of
Pakistan, and the University of Agriculture, Faisalabad, for this project to explore the factors responsible
for low water productivity as well as demonstrating the remedial measures at farmer’s fields for its
improvement. We also appreciate the efforts of the representatives of the donor agency, and members of
the Research Advisory Committee, especially Drs. David Orden and Stephen Davies, for providing
guidelines and timely help during the execution of this project. We duly acknowledge the input given by
the learned reviewers on the interim and final reports of this project for improving the quality of the project
as well as making it more pragmatic for implementation while keeping in view the farming conditions and
economic viability of the proposed strategies and policies. We thank Andrew Comstock at IFPRI for help
preparing the final report.

ABSTRACT
Water productivity (WP) is reported lower in Pakistan when compared to the rest of the world. This paper
investi-gates the factors responsible for low water productivity and demonstrates various irrigation
techniques farmers could use for its improvement. A comprehensive questionnaire was designed, and 230
farmers were interviewed in a cotton-wheat area (Samundri-site I), a mixed crop area (Chiniot-site II), and
a rice-wheat area (Hafizabad-site III) in Rechna Doab, Punjab, Pakistan. This survey found that the
majority of farmers expressed major concerns about shortages of canal water, energy, and fertilizer. These
issues were the main factors affecting their land and water productivity. Field experiments were conducted
at the above mentioned sites. The results indicated that drip irrigation was the most efficient irrigation
technique, which produced a maximum WP of 2.26 kg m-3 for wheat. Drip irrigation was 98% efficient,
and water savings were 40% better when compared with that under conventional irrigation. The perforated
pipe irrigation technique also resulted in relatively better WP averaging 1.51 kg m-3 and averaged 77%
efficiency with water savings of 18%. Gross margin for the drip irrigation system was found to be higher
than for perforated pipe in the same area (with margins of Rs. 36,832.84 in the first year). Drip irrigation
also shows a benefit cost ratio (BCR) of 1.69 at a 4% discount rate (close to real interest rate) and an
internal rate of return (IRR) of 36% in district Faisalabad for its 10-year useful life. For perforated pipe
irrigation, gross margins were also higher than the conventional irrigation method in the first year of
production in all districts. For the entire useful life of perforated pipe (three years), the BCR ranged from
1.88 to 2.39 at a 4% discount rate depending on site conditions, and was found to be profitable at all
discount rates in all the districts. The IRRs for perforated pipe were 187%, 277%, and 197% in districts
Faisalabad (Samundri site), Chiniot, and Hafizabad, respectively. These findings suggest that flexible
irrigation techniques, in response to crop water requirements, can improve land and water productivity.

iii
TABLE OF CONTENTS
About the Authors ............................................................................................................................ ……..ii
Acknowledgments....................................................................................................................................... iii
Abstract .................................................................................................................... ................................... iii
List of Tables and Figures .......................................................................................................................... v
Introduction ................................................................................................................ ................................. 1
Review of Relevant Studies .................................................................................................. ....................... 3
Materials and Methods ................................................................................................................................ 4
Study Area .................................................................................................................. .................................... 4
Economic Analysis ......................................................................................................................................... 7
Results and Discussions ................................................................................................................................ 8
Factors Affecting Water Productivity ............................................................................................................. 8
Field Experimental Results ........................................................................................................................... 10
Economic Results..................................................................................................... ..................................... 12
Conclusions and Recommendations .......................................................................................................... 16
Field Survey ............................................................................................................... ................................... 16
Field Experiments ................................................................................................. ........................................ 17
Policy Recommendations ............................................................................................................................. 17
References ........................................................................................................ ............................................ 19

LIST OF TABLES AND FIGURES

Table 1: Schedule of Management Activities at the Samundri Site ............................................................. 6

Table 2: Education Level of Respondents ................................................................................................... 10
Table 3: Age of Respondents ........................................................................................................ ............... 10
Table 4: Farm Location of Respondents .............................................................................................. ........ 10
Table 5: Field Irrigation Efficiencies (%) and Water Savings (%) for Wheat Crop from Experimental Sites
....................................................................................................................................................................... 11
Table 6: Irrigation Method Effects on Wheat Yield (Kg ha-1) .................................................................... 11
Table 7: Irrigation Method Effects on Water Productivity for Wheat (kg m-3) .......................................... 11
Table 8: Economic Analysis (Single Year) of per Acre Wheat Production Under Three Different Irrigation
Systems in District Faisalabad (Samundri site) ............................................................................ 13
Table 9: Economic Analysis of Per Acre Wheat Production Under Conventional and Perforated Pipe
Irrigation Systems in District Chiniot ........................................................................................... 14
Table 10: Economic Analysis of Per Acre Wheat Production Under Conventional and Perforated Pipe
Irrigation Systems in District Hafizabad .................................................................................... 15
Table 11: BCR, NPV, and IRR (Per Acre) for Drip Irrigation (10-year useful life) at Different Discount
Rates ........................................................................................................................................... 16
Table 12: BCR, NPV, and IRR (Per Acre) for Perforated Pipe Irrigation (3-year useful life) at Different
Discount Rates ............................................................................................................................ 16
Figure 1: Map of the Study Area in Rechna Doab ........................................................................................ 5
Figure 2: Factors Identified by Farmers as Affecting Water Productivity at the Samundri, Chiniot, and
Hafizabad Areas ............................................................................................................................. 9

iv
INTRODUCTION
Pakistan is primarily an agricultural country and its agricultural production depends on adequate
availability of irrigation water supplies as it lies in the arid to semi-arid region. The average annual rainfall
varies from 328mm in southern parts of the country to more than 2,000mm in the northern mountainous
areas. Because of this, the country has built the largest contiguous irrigation system comprising three
reservoirs (Mangla, Tarbela, and Chashma), 23 barrages/head works, 12 inter-river link canals and 45 canal
commands, extending over 60,800km, and providing water to over 140,000 watercourses (GOP, 2013). The
canal commanded irrigated area is about 16 million hectares (Mha) in addition to about 4 Mha of rain fed
areas. The major sources of irrigation water are river supplies, with 70% of their water from melting of
glaciers and 30% from monsoon rainfalls. These river supplies are seasonal and vary from less than 100
million acre-feet (MAF) during dry years to more than 150 MAF during heavy rainfall and flood seasons.
Irrigation water is diverted from rivers to canals and reaches the fields through gravity. Although it is a
marvelous gravity flow system, which does not require any additional energy for its flows, its irrigation
efficiency is very low, about 40%, due to water losses during its operational and application phases
(Hussain et al., 2011). These water losses occur during conveyance from head works on rivers to the fields
through the canal networks and watercourses and also from the irrigated fields. In order to improve
irrigation efficiency, there is the need to monitor and minimize these losses using efficient and innovative
methods.

There are a number of irrigation methods which have the potential to apply water efficiently.
However, each method works best under specific farming conditions. For example, sprinkler irrigation is
mostly suitable under undulating terrain where it is otherwise difficult to apply irrigation water through
gravity. Similarly, drip irrigation is highly suitable for point application of irrigation water especially for
orchards (Bakhsh et al., 1994). Both sprinkler and drip are considered as pressurized high efficiency
irrigation systems. In Punjab, Pakistan, in the irrigated canal command areas, cultivated land is mostly flat
and fields are leveled. Farmers grow mostly row crops and apply irrigation water in the form of flooding.
Recently, the situation has begun to change. Irrigation water is becoming scarce as water availability in
Pakistan has approached about 1000 m3/capita, categorizing the country as a water deficit country.
Moreover, projections show that with the current pace of population growth, water availability will reach
915 m3/capita in 2020 (GOP, 2011). Under these circumstances, we need to apply irrigation water
efficiently to increase water productivity, which has been reported to be as low as 0.1 kg m-3 of water
(GOP, 2012).

To improve water productivity either we have to increase the crop yields, minimize water losses,
or both. In Punjab, the majority of farmers have small land holdings of less than 5 ha. These small farmers
usually cannot afford expensive irrigation systems such as sprinkler and drip irrigation systems, although
they certainly wish to apply irrigation water efficiently in the wake of the soaring energy prices. In
Pakistan, diesel prices are quite high, and electric tube wells are subject to frequent load shedding
problems. In addition to surface water, tube wells, i.e. groundwater, accounts for more than 50% of the crop
water requirement. In addition, under existing irrigation methods, tube well water takes a significant
amount of time to reach the fields. Tube wells first fill the watercourses and then start irrigating the fields.
Exacerbating this, often once the watercourses are filled, the electricity fails, leaving the filled watercourses
to lose water in the form of seepage and other losses.

Keeping in mind these issues, there is a need to introduce cheap and innovative methods to
improve water productivity and irrigation efficiency. There are efficient irrigation methods, but their
economic viability has not been thoroughly evaluated. There are questions about these methods such as,
what are the payback periods and benefit cost ratios (BCR)? This paper investigates different irrigation
techniques which can be adopted easily by the farmers and also do not require a prohibitive amount of
technical knowledge. The paper evaluates the economic viability of these methods. The following are the
specific objectives of the paper:

[1]
1. Identify the causes responsible for low water productivity and suggest various retrofit measures
for its improvement.
2. Conduct field experiments to demonstrate the benefits of the proposed efficient irrigation systems
for improving water productivity.
3. Evaluate the economic viability and benefits to the farmers of the proposed irrigation techniques in
terms of BCR, Net Present Value (NPV), and Internal Rate of Return (IRR).

[2]
REVIEW OF RELEVANT STUDIES
A broad literature exists on water productivity and the effect of different irrigation systems and practices on
productivity. Below are some select studies from the literature covering these topics from both an
international perspective and the Pakistani context. Several additional references are also cited later in the
paper. Masikati et al. (2014) compared treatments comprising manure application (MN) and maize-mucuna
rotation (MMR) against farmer practice (FP). The average values for water productivity for maize under
FP, MN, and MMR interventions were 0.32 kg m-3 , 0.40 kg m-3 and 0.70 kg m-3 , respectively, and 1.34
kg m-3 for mucuna. Negative trends were shown by the crops under FP as well as MN, while positive
trends were shown under MMR interventions in soil organic carbon (SOC) and total nitrogen (TN) for 30
years. Average losses for FP and MN ranged from 17 to 74 kg ha-1 yr-1 and 6-16 kg ha-1 yr-1 ,
respectively, and increased under MMR, ranging from 2.6 to 194 kg ha-1 yr-1 and 6 to 14 kg ha-1 yr-1 .
They concluded that under nutrient depleted soil, the small landholders can use MMR interventions to
increase water productivity. Shabbir et al. (2012) assessed the present status of water productivity in a
cotton-wheat zone and identified the factors needed to improve water productivity in district Khanewal on
the Lower Bari Doab Canal command area taking off from river Ravi. Mean yield, actual, and apparent WP
for the wheat crop were calculated as 3,210 kg ha-1 , 1.12 kg m-3 , and 0.43 kg m-3 , respectively. The
corresponding values for cotton were 2,675 kg ha-1 , 0.22 kg m-3 , and 0.26 kg m-3 , respectively. They
concluded that fertilizer, pesticide, and irrigation water increased the actual water productivity. Srivastava
et al. (2012) investigated the considerable savings in water by the adoption of sprinkler and drip irrigation
systems in water scarce areas in India. The study explained that loss of water was eliminated in drip method
cases in which water was directly trickled into the soil near the root zone of the crop, resulting in
considerable water saving. The research also reported the drip irrigation method as more suitable to row
crops. The results indicated 25% to 60% water savings and a 60% increase in yield from using the drip
irrigation method compared with conventional surface irrigation methods. Hashim et al. (2012) determined
the crop water requirement and crop water productivity of different crops at the research farm in King
Abdul-Aziz University, Hoda Al-Sham, Makkah region, Saudi Arabia. The water requirements for seasonal
and forage crops ranged from 303 to 727.8 mm and 436.7 to 1,821.94 mm, respectively. The summer
season crops had higher values of water productivity (1.478 kg m-3 ) than that for forage crops (0.794 kg
m-3 ). The Okra crop had the highest water productivity at 1.724 kg m-3 . Moayeri et al. (2011) conducted
a study to estimate yield, water consumption and water productivity of maize during the 2006 and 2007
growing periods in the Karkheh River Basin in Iran. The average yield of maize was 4,844 kg ha-1 . They
also estimated rain and irrigation (I+R) water productivity, water application efficiency, and maize crop
water productivity as, 0.38 kg m-3 , 38.6%, and 1.01 kg m-3 , respectively. The results of this study showed
that the major reasons for low water productivity were the lack of farmer’s knowledge about irrigation,
plant nutrient insufficiencies, and poor management practices. Ashraf et al. (2010) also conducted a study
to evaluate the existing water productivity in Lower Bari Doab Canal command area. The average yields,
for wheat, rice, sugarcane, and spring maize at Jandraka distributary, were found as 2,884, 2,606, 49,912,
and 6,443 kg ha-1 , respectively, whereas the average water productivities were 0.73, 0.08, 2.01 and 0.54
kg m-3 , respectively. At the 15-L distributary, the average yield for wheat, cotton, sugarcane, and spring
maize were determined as 3,096, 2,056, 49,400, and 8,854 kg ha-1 , respectively, whereas water
productivities were 0.65, 0.33, 1.08, and 0.80 kg m-3 , respectively. Except for maize, the gap between
average and potential yields was more than 50%, and the gap between average and potential water
productivity was above 70% for both the distributaries. Dilbagh et al. (2010) conducted field experiments
to evaluate the effect of different irrigation methods on the yield of seed cotton. The study found that the
drip irrigation method significantly increased seed cotton yield over furrow irrigation. A maximum water
use efficiency of 7.9 kg ha-1 mm-1 and water savings of about 54% were recorded under the drip irrigation
system as compared to that under the furrow irrigation system. 3 SUMMARY | APRIL 2010 Ghamarnia et
al. (2010) examined the effects of different drip and furrow irrigation treatments on water use efficiency in
the west of Iran. The results indicated the amount of water usage in furrow irrigation systems was about 1.8
times higher than that under surface drip irrigation systems. They also found that the grain yields, with the
help of drip sets, were 188 kg/ha more than that under furrow. The water use efficiency of the drip
[3]
irrigation system (1.39 kg ha-1 mm-1 ) was also higher than that under the conventional furrow irrigation
system (0.492 kg ha-1 mm-1 ). Ashfaq et al. (2009) quantified the impact of ground water on wheat
production in district Jhang, Punjab, Pakistan. The results showed that tube well irrigation accounted for
19% of the total cost of production for wheat crops. The findings of the study suggested certain guidelines
for policy makers to formulate policies that could promote wheat production through efficient use of
groundwater. Bakhsh et al. (2008) conducted a study at NIAB, Faisalabad to compare the effects of 15%
(D15) and 30% (D30) deficit irrigation on water use efficiency of cotton in comparison to no deficit (D0)
irrigation using a drip irrigation system. All three treatments of D0, D15, and D30 were applied with twelve
irrigations. Total applied water was 507, 444, and 381 mm, respectively. The cotton yield was measured in
the field using a top loading balance. The D0, D15, and D30 produced yields of 3,112, 2,862, and 2,078 kg
ha-1 , respectively. The water use efficiency of D0, D15, and D30 were 0.56, 0.58, and 0.49 kg m-3 ,
respectively. The D15 treatment resulted in better water use efficiency and showed the potential to improve
efficiency in water stressed areas. Narayanamoorthy (2008) investigated the impact of drip irrigation
systems on cotton and the potential economic benefits to the farming communities in three case studies.
The study found a 50% reduction in irrigation cost by using drip irrigation. The author also reported a 45%
water savings as compared to the conventional irrigation practice. The study also estimated 114% higher
productivity than that under conventional irrigated. Uzunoz and Akcay (2006) conducted a study to
determine the profitability and feasibility of fruit farms in Turkey. Three criterion, the benefit cost ratio
(BCR), net present value (NPV), and internal rate of return (IRR) were used for the analysis. Different
discount rates were used to calculate the BCR and NPV of the farms. BCR was also found to be positive for
all of the interest rates and for all of the fruits. The results showed that NPV was positive at all the discount
rates. The IRR for the fruits was also found positive. The results showed that the investment in the fruit
orchards was economically feasible.

MATERIALS AND METHODS

Study Area
This study was conducted at three sites in the following locations: Samundri (30.48° N, 71.52° E), Chiniot
(31.72° N, 72.97° E.), and Hafizabad (32.03° N, 73.11° E.). These sites are situated in Rachna Doab—an
area between the Ravi and Chenab Rivers—located in Punjab province of Pakistan, as shown in Figure 1.

To investigate soil classification and texture in the study area, soil samples were collected from
each site and were sent to the Ayub Agriculture Research Institute (AARI) for analysis. The results showed
that the Samundri site has clay loam soil with 34% sand, 26% silt, and 40% clay. The soil has organic
matter of 0.62% with a pH ranging between 7.5 and 7.8. The Chiniot site is fertile, has alluvial soil, and can
be classified as sandy loam with 78% sand, 7% silt, and 15% clay. The organic matter in the soil is 0.78%
with a pH ranging between 7.8 and 7.9. The soil of the Hafizabad site is also alluvial, fertile, and classified
as sandy clay loam with 57% sand, 12% silt, and 32% clay.

The study area (all sites) has diverse climates, with hot summers and cold winters. The maximum
temperature in summer reaches up to 49°C, and in winter, the minimum temperature may fall near the
freezing point. Summer starts from April and continues until October in the study area, and winter starts
from November and continues till March. June and July are the hottest months, whereas December and
January are the coldest months. Average annual rainfall at the Samundri, Chiniot, and Hafizabad sites is
about 350mm, 399mm, and 790mm, respectively (ASP, 2010).

[4]
Figure 1: Map of the Study Area in Rechna Doab

During phase-I of the study, a comprehensive questionnaire was designed to determine water
productivity for wheat crops at all sites and to explore the causes for low water productivity and the factors
affecting it. The questionnaire was pretested in the field to identify deficiencies in the proforma as well as
to incorporate various concerns of the farmers to make the questions more clear.

After developing the questionnaire, the sites were selected for primary data collection. For this, 80
farmers from Samundri, 66 from Chiniot, and 84 from Hafizabad were randomly selected from five villages
in the vicinity of each site. From each village, about 13-16 farmers were interviewed and detailed
information regarding their farming practices and crop yields was collected.

The survey data was analyzed to determine general descriptive characteristics of the study area
such as education level, age of respondents, farmers land holdings, soil fertility level, cropping pattern and
intensity, crop yields, and irrigation water sources and their quality. On each site, field irrigation
efficiency was calculated using following relationship:

where,

Ei = Field Irrigation Efficiency (%)

CWR = Crop Water Requirement (mm)
WA = Water Applied (mm)

Water savings for drip and perforated pipe irrigation were calculated by comparison with the conventional
irrigation system.

Water productivity of wheat crops for each site was calculated by using the following relationship:

[5]
 Crop yields were estimated from information obtained in the survey of the farmers. The total water
applied was determined by multiplying number of irrigations with the discharge of tubewells plus water
delivered through mogha (canal outlet) of the surveyed watercourses.

During phase-II of the study, field experiments were conducted at farmer’s fields in the three sites
under Randomized Complete Block Design (RCBD). Wheat was grown at each site during 2012-13. At the
Samundri site, wheat was grown using conventional irrigation and two high efficiency irrigation systems
(HEIS)—drip and perforated pipe irrigation. On the other sites, wheat was grown with conventional
irrigation and two efficient irrigation methods—perforated pipe (which is HEIS) and with open end pipe
irrigation methods.

Management practices such as cultivation, planking, sowing, fertilizer application, irrigation

application, and harvesting were performed at each site. The schedule of management activities performed
at the Samundri site is shown in Table 1, as an example. After harvesting, wheat yield was determined at
each site using a steel frame of 1 m2 in size.

Table 1: Schedule of Management Activities at the Samundri Site

Step Number Activities Date
Pre-sowing irrigation
1 6-Nov-12
(Rouni)
2 Cultivation with tine 18-Nov-12
3 Cultivation with Rotavator 18-Nov-12
4 Planking 19-Nov-12
5 Sowing 19-Nov-12
Soil sampling before
6 17-Nov-12
sowing
DAP Fertilizer application
7 18-Dec-12
@ 123.5 kg/ha
Urea Fertilizer application
8 18-Dec-12
@ 123.5 kg/ha
9 1st Irrigation 18-Dec-12
Urea Fertilizer application
10 2-Feb-13
@ 123.5 kg/ha
11 2nd Irrigation 2-Feb-13
Urea Fertilizer application
12 21-Mar-13
@ 123.5 kg/ha

13 3rd Irrigation 21-Mar-13

14 Harvesting 1-May-13

[6]
Economic Analysis
The procedure adopted by Chaudhry et al. (1992) for estimating, and subsequently apportioning, the cost
and returns of various budget items was used in this study. However, we adjusted it to account for the costs
incurred by the investment in irrigation systems. The three irrigation techniques at the experimental sites
(conventional, perforated pipe, and drip), as well as the farmer surveys (conventional irrigation), were
compared on the basis of gross margins. This method does not account for the total fixed cost, only variable
cost, and in our case irrigation investment costs as well. Although the perforated pipe and drip irrigation
systems have longer useful lives than one season, the gross margin for one year was estimated for the
purpose illustratively comparing the three irrigation systems in the first year. The formula used to calculate
the gross margins was:

Gross Margin (GM) = Total Revenue (TR) – (Total Variable Cost (TVC) + Irrigation Investment Costs)

Total variable costs include land preparation, seed, fertilizers, labor, harvesting and threshing
1
costs, and markup of 4 percent on variable costs. Also included in total variable costs are the irrigation
costs, made up of the fixed water charges (Abiana) and the variable tube well charges. This is where much
of the water savings from the irrigations systems will be reflected in costs.

Irrigation Investment Costs include the depreciation cost and the interest charge on the
depreciation for one production season for the perforated pipe and drip irrigation methods (Seckler et al.,
1987). The costs for drip and perforated pipe irrigation systems include high installation costs, but they also
have significant useful lives. Drip irrigation in the field has a useful life of ten years (Asmon and Rothe,
2006). While the useful life of perforated pipe is three years, if it is handled carefully and stored between
seasons in a dry place away from direct sunlight (Enciso and Peries, 2005). Using the depreciation cost,
plus an interest charge on the depreciation costs, captures the cost of one year’s worth of investment in the
2
irrigation system. The rate of interest was taken as 4 percent, which is close to the real interest rate
prevailing in Pakistan during the last three years.

After the above calculations were used to estimate the Gross Margins of the farmers in the first
year, the per acre total costs and total benefits were used to estimate the economic returns of perforated
pipe and drip irrigation systems at the experimental sites over their entire useful lives. Using these
standards, the economic analysis in the later portion of the paper was carried out as given below:

Discounted capital budgeting techniques: Three measures are often used in finding the present worth of
the future values of a project: BCR, NPV, and IRR. These were used by Uzunoz and Akcay (2006) and also
by Satyasai (2009), and are employed in this analysis. In the BCR and NPV techniques, total costs and
benefits in the various years of the useful life of the equipment are discounted using different discount
factors. For simplicity, it is assumed in this analysis that costs and revenue stay constant in “current” rupees
at observed values in 2012. In other words, we assume zero inflation and that input-to-output prices remain
constant. Otherwise we would have to increase the nominal (“current”) value of costs, revenue, and
margins in the future years and use some forecasts of future relative prices. It is also assumed that
perforated pipe and drip irrigation systems have zero salvage value at the end of their useful lives and the
total cost of the investment in these projects is made in the first year. BCR, NPV, and IRR have been
estimated using the formulas below with the notation in the formulas:

Bt = benefit in each year

1
This markup is to represent the interest rate associated with farmers needing to borrow money to purchase the inputs
which make up TVC.
2
Another method to show this would be an amortization calculation. When the depreciation plus interest method is
compared to amortization for the first year of perforated pipe in Samundri we get Rs. 6,066.66 and Rs. 6,306.10
respectively. This tell us that the respective calculations are comparable.
[7]
 Ct = cost in each year
r = discount rate
t= number of years (1, 2, 3 …n)

The BCR is the ratio of the present value of benefits and the present value of costs and is given as:

BCR

A project is considered viable when the BCR is more than 1.

The NPV is the difference between the PV of benefits and PV of costs and illustrates the net worth of a
project. It is representative of dynamic investment appraisal and a discounted cash flow method given as:

NPV = -

The decision criterion is to select projects with a positive NPV and rank the selection of projects as per the
magnitudes of NPVs in case of capital rationing.

The IRR is considered to be the most appropriate tool to evaluate economic efficiency of drip and
perforated pipe irrigation systems, because it does not depend on the application of an arbitrary discount
factor (Asmon and Rothe, 2006). The earlier two measures are computed at a given rate of discount. Here
the implied discount rate is computed such that the PV of benefits equals the PV of costs and the NPV
becomes zero. Thus, the IRR is the interest rate ‘r*’ at which NPV is zero.

IRR = r* such that NPV= 0

The decision rule would be to select the project with the highest IRR compared to the cost of capital and
rank projects based on this comparison.

RESULTS AND DISCUSSIONS

Factors Affecting Water Productivity
From an irrigation standpoint, location of the site was important. The Samundri site was at the tail of the
irrigation network commanded by Gogera branch canal. The farmers interviewed in Samundri expressed
their concerns about shortages of canal water (74%), poor quality groundwater (65%) and fertilizer issues
(61%). Similarly, 95%, 91% and 80% of the farmers in Chiniot showed concerns regarding canal water
shortages, energy, and fertilizer issues, respectively, even though the Chiniot site has good quality
groundwater in most of the area. In the Hafizabad area, 89%, 85%, and 49% or farmers ranked their
primary concern as energy, fertilizer, and canal water shortages, respectively (Figure 2 shows frequency of
the responses).

[8]
Figure 2: Factors Identified by Farmers as Affecting Water Productivity at the Samundri,
Chiniot, and Hafizabad Areas

80
60 Samundri Area
Frequency
Sample Size = N = 80

40
49 51 59
20 32 35
14 24
0

80
Chiniot Area
Frequency

60 Sample Size = N = 66

40
53 60 63
20 32 37
16 22
0

80
Frequency

60 Hafizabad Area
Sample Size = N = 84
40 72 75
20 41
10 17 21
0

This survey shows that a majority of farmers expressed major concerns regarding shortages of
canal water, energy, and fertilizer issues as primary factors affecting their water productivity. Other factors
such as seed, financial constraints, soil fertility, and lack of mechanization were also reported as the factors
affecting their crop yields and land and water productivity.
The majority of the farmers surveyed had an education level under matric (secondary school
education) and were 30 to 50 years old. Table 2 shows the education level of respondents in the three areas.
Accordingly, 40% farmers have an education level below matric, out of which on average 9% were
illiterate across the three sites. Out of those above matric, 40% of the farmers listed matriculation as their
education level, while only 6% reported having graduated. In total, 59% of the respondents had a
qualification of matric and higher, which might be one of the most important factors contributing towards
better farming practices in the study area.

[9]
Table 2: Education Level of Respondents
Samundri Chiniot Hafizabad Average
Education Level
(%) (%) (%) (%)
Illiterate 17.5 6 2.4 9
Primary 8.75 21.2 21.5 17
Middle 13.75 19.7 11.9 15
Matric 41.25 42.4 35.7 40
Intermediate 13.75 10.6 15.5 13
Graduation 5 ----- 13 6

The age of respondents was grouped into four classes as shown in the Table 3. About 14% of
respondents were 20 to 35 years old, 33% were 36 to 50, 33% were 51 to 65, and only 16% were more than
65 years old. The results indicated that 49 percent of the farmers were more than 50 years old, indicating
that there is substantial cumulative experience within the surveyed farmers.

Table 3: Age of Respondents at Three Sites

Age Samundri Chiniot Hafizabad Average
(Years) (%) (%) (%) (%)
20-35 23.75 13.6 4.8 14
36-50 37.5 36.4 25 33
51-65 31.25 30.3 38.9 33
65+ 7.5 19.7 31.3 20

Table 4 shows the frequency distribution of farm location with respect to canal outlet, i.e. head,
middle, and tail, at all sites area. The survey results indicate that farm location is potentially correlated to
wheat yield. Farms at the head saw the highest wheat yields. The field survey indicated that 53% farms
were located at the tail of the watercourse and had less canal water availability. For the whole sample, 7%
of farmers had land at the head of the watercourse, while 40% farmers were located at the middle.

Table 4: Farm Location of Respondents

Farm Samundri Chiniot Hafizabad Average
Location (%) (%) (%) (%)
Head 17.5 3 1.2 7
Middle 20 18.2 80.9 40
Tail 62.5 78.8 17.9 53

Field Experimental Results

In the following tables and discussion, we present and analyze the results from the experimental field sites.

Table 5 shows the water applied and field irrigation efficiencies for the wheat crop from the
experimental sites for the four types of irrigation. The water savings for drip and pipe systems compared to
conventional irrigation is also shown. The results show that field irrigation efficiency for drip and
perforated pipe irrigation was 98% and 77%, respectively, compared to 74% and 63% for open end pipe
and conventional. The conveyance efficiency for perforated pipe irrigation was 100%, as the water was
conveyed through pipes from the source to the fields, without seepage losses.

[10]
Table 5 : Field Irrigation Efficiencies (%) and Water Savings (%) for Wheat Crop from
Experimental Sites
Perforated Pipe Open End Pipe Conventional Water Saving Over
Drip Irrigation
Irrigation Irrigation Irrigation Conventional Irrigation
Site
WA Ei WA Ei WA Ei WA Ei
Drip Perforated Open end
(mm) (%) (mm) (%) (mm) (%) (mm) (%)
Samundri 224.9 98.5 289.1 76.63 - - 373.3 59.39 40 22 -
Chiniot - - 301.7 72.81 296.3 74.07 337.9 64.95 - 10 12
Hafizabad - - 316.3 82.43 350 74.47 405.2 64.34 - 22 13
Average 224.9 98.5 302.36.4 77.29 323.2 74.27 372.1 62.89 40 18 13
Note: WA= Water applied; Ei = Field Irrigation Efficiency

Wheat yields under each irrigation method is shown in Table 6. Treatment using drip irrigation
produced the maximum wheat yield of 5,076.67 kg ha -1, while the conventional irrigation treatment had the
lowest yield on average of 3,651.11 kg ha-1, demonstrating that irrigation using traditional watercourses
produced lower wheat yields. The results for all treatments were significantly different from each other at
the 5% probability level. Drip irrigation and perforated pipe irrigation showed a 39% and 25% increase in
yields as compared with conventional irrigation, while open end pipe showed a 19% increase. Similar
results have been reported by Mahmood and Ahmad (2005).

Table 6: Irrigation Method Effects on Wheat Yield (Kg ha-1)

Treatment Samundri Chiniot Hafizabad Average
Conventional 3373.33c 3840.00c 3740.00c 3651.11d
4230b 5184.67a 4370.00a 4594.89b
Perforated
(25%) (35%) (17%) (25%)
b b
4586.67 4123.33 4355.00c
Open End -
(19%) (10%) (19%)
a
5076.67 5076.67a
Drip - -
(50%) (39%)
Note: Treatment means w ith different letters are significantly different from each other at p≤0.05.

The data for water productivity for the wheat crop at all the sites with their respective treatments is
shown in Table 7. The average water productivity for drip irrigation was 2.26 kg m-3 as compared with that
under conventional method which was 0.98 kg m-3. All treatments were significantly different from one
another at the 5% probability level.

Table 7: Irrigation Method Effects on Water Productivity for Wheat (kg m-3)
Treatment Samundri Chiniot Hafizabad Average
c c c
Conventional 0.90 1.14 0.92 0.98d
a a a
Perforated 1.46 1.72 1.36 1.51b
Open end - 1.55b 1.18b 1.36c
b
Drip 2.26 - - 2.26a
Note: Treatment means w ith different letters are significantly different from each other at p≤0.05.

[11]
Economic Results
Table 8 shows the economic analysis of per acre wheat yield under conventional irrigation,
perforated pipe, and drip irrigation systems in district Faisalabad. For the economic analysis, results are
presented for conventional irrigation, both at the experimental sites, and from the farmer surveys. The open
end pipe system did not show much improvement over the conventional method so it was dropped from
this portion of analysis.

The total cost of wheat production was calculated by adding the per acre total variable cost and
total irrigation investment cost. As most of the farmers own their own land, land rent was not included in
the analysis. The per acre total cost incurred under drip irrigation was Rs. 35,015.16, the highest of the
three methods. This was due to the high installation cost of the drip irrigation system. As mentioned before,
the investment cost was taken in the form of depreciation cost and interest for one cropping season, as we
are only looking at the gross margins for the first year. The installation cost of perforated pipe also
increases the total cost compared to conventional irrigation during the study periods.

While the fixed costs of these systems are higher, the total variable cost of the drip and perforated
pipe systems were less than conventional irrigation method in both the farmer survey analysis as well as the
experimental sites. This is mainly due to decreases in irrigation and fertilizer costs per acre, as these new
irrigation systems are more efficient. The per acre total revenue of wheat production also increases under
these systems. This change was most dramatic at the experimental site under drip irrigation system, with a
revenue of Rs. 71,848.

Gross margins of the various methods are also compared in Table 8. It was found that the gross
margins obtained from the conventional method for both the farmer survey (Rs. 22,053.69) as well as at
experimental station (Rs. 19,199.46) were far below that of the perforated pipe and drip irrigation systems.
The gross margin for drip irrigation was calculated to be Rs. 36,832.84, which is the highest amongst three
irrigation systems. It is important to note that the results from Faisalabad are the only with a direct
comparison between the perforated pipe and drip systems, and drip has an advantage over perforated pipe
at this site.

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Table 8: Economic Analysis (Single Year) of per Acre Wheat Production Under Three
Different Irrigation Systems in District Faisalabad (Samundri site)
Conventional Conventional Perforated Drip
Method Method Pipe Irrigation
Activity
(Farmer Survey, (Experimental (Experimental (Experimenta
N=80) Data) Data) l Data)
Total Variable Cost (Rs.) 26,097.31 27,743.04 24,412.04 22,535.16
Land Preperation 2,915.78 3,000.00 3,000.00 3,000.00
Seed 1,235.81 1,800.00 1,800.00 1,800.00
Fertilizer 9,477.71 7,800.00 7,800.00 5,850.00
Irrigation 3,734.14 4,698.76 1,237.00 1,543.00
Manual Labor Charges 2,113.35 2,100.00 2,100.00 2,100.00
Mark Up (at 4% interest) 345.57 344.28 275.04 242.16
Harvesting 3,000.41 4,000.00 4,000.00 4,000.00
Threshing 3,274.54 4,000.00 4,200.00 4,000.00
Irrigation Investment Cost (Rs.) 0.00 0.00 6,066.66 12,480.00
Depreciation 0.00 0.00 5,833.33 12,000.00
Interest Charge 0.00 0.00 233.33 480.00

Total Cost (Rs.) 26,097.31 27,743.04 30,478.70 35,015.16

Total Revenue (Rs.) 48,151.00 46,942.50 58,863.75 71,848.00

Gross Margin (Rs.) 22,053.69 19,199.46 28,385.05 36,832.84

Table 9 depicts the economic analysis of per acre wheat production in district Chiniot. The results
are in line with the previous results from the Samundri site, although drip irrigation was only carried out at
Samundri. The total cost under perforated pipe was highest, with a cost of Rs. 29,985.66, and the total
revenue earned from perforated pipe was also the highest at Rs. 73,458. The results show that the gross
margin was again lowest for the conventional irrigation, at Rs. 26,927.40, and perforated pipe had the
highest gross margin, at Rs. 43,472.34.

[13]
Table 9: Economic Analysis of Per Acre Wheat Production Under Conventional and
Perforated Pipe Irrigation Systems in District Chiniot
Conventional Conventional Perforated
Method Method Pipe
Activity
(Farmer Survey, (Experimental (Experimental
N=66) Data) Data)
Total Variable Cost (Rs.) 24,970.17 24,559.80 23,919.00
Land Preperation 3,023.67 3,000.00 3,000.00
Seed 1,358.99 1,750.00 1,750.00
Fertilizer 8,589.00 7,800.00 7,800.00
Irrigation 3,700.00 1,540.00 1,000.00
Manual Labor Charges 2,128.68 2,190.00 2,100.00
Mark Up (at 4% interest) 331.43 279.80 269.00
Harvesting 3,000.00 4,000.00 4,000.00
Threshing 2,838.40 4,000.00 4,000.00
Irrigation Investment Costs (Rs.) 0.00 0.00 6,066.66
Depreciation 0.00 0.00 5,833.33
Interest Charge 0.00 0.00 233.33
Total Cost (Rs.) 24,970.17 24,559.80 29,985.66
Total Revenue (Rs.) 51,897.57 54,404.00 73,458.00
Gross Margin (Rs.) 26,927.40 29,844.20 43,472.34

Table 10 conveys the same analysis for the Hafizabad site. The results reveal that the total cost,
Rs. 24,813.32, was highest in the perforated pipe system. Again the total cost was high due to the
installation cost of perforated pipe that was included in form of depreciation with an interest charge.
Nevertheless, the gross margin was Rs. 31,586.68 for perforated pipe, which was higher than the
conventional irrigation method, whether having been reported by farmers or observed at the controlled
experimental site.

[14]
Table 10: Economic Analysis of Per Acre Wheat Production Under Conventional and
Perforated Pipe Irrigation Systems in District Hafizabad
Conventional Conventional Perforated
Method Method Pipe
Activity
(Farmer Survey, (Experimental (Experimental
N=66) Data) Data)
Total Variable Cost (Rs.) 22,912.80 19,564.04 18,451.98
Land Preperation 4,063.50 3,950.00 3,950.00
Seed 1,340.20 1,400.00 1,400.00
Fertilizer 7,317.09 7,850.00 7,850.00
Irrigation 2,730.16 1,447.90 954.70
Manual Labor Charges 2,189.17 2,625.00 2,016.00
Mark Up (at 4% interest) 307.20 291.14 281.28
Harvesting 2,485.41 N/A N/A
Threshing 1,686.86 N/A N/A
Combine Harvesting and
793.21 2,000.00 2,000.00
Threshing
Irrigation Investment Costs (Rs.) 0.00 0.00 6,361.34
Depreciation 0.00 0.00 6,116.67
Interest Charge 0.00 0.00 244.67
Total Cost (Rs.) 22,912.80 19,564.04 24,813.32
Total Revenue (Rs.) 44,943.43 45,420.00 56,400.00
Gross Margin (Rs.) 22,030.63 25,855.96 31,586.68
Note: N/A represents that farmers in the experimental sites used a combined harvesting and threshing method

The data from the Hafizabad area showed lower values of total revenue and gross margin than in
district Chiniot across all three columns. Comparing Hafizabad and Faisalabd, we see that Faisalabad had
higher revenues in all three columns, yet Hafizabad farmers saw higher gross margins at the experimental
sites under conventional and perforated pipe. This difference is due to the lower total variable costs
incurred by farmers in Hafizabad.

Overall the results from Tables 8-10 show that new irrigation methods have a significant
advantage, in terms of gross margin, over the conventional method. Drip irrigation was only tested in
Faisalabad, and there it was found to have an advantage over both perforated pipe and conventional.
Perforated pipe was also shown to have much higher gross margin than the conventional method in
Faisalabad. The highest gross margin was seen for perforated pipe in Chiniot, with a significant advantage
over conventional method. The analysis from the Hafizibad site concurs, showing that perforated pipe has a
significant advantage over the conventional method when it comes to gross margins.

Moving to the discounted capital budgeting techniques discussed before, Table 11 shows the
discounted BCR and NPV at different discount rates for wheat production on a per acre basis under the drip
irrigation system. The BCRs and NPVs were calculated from the total benefits accrued via production and
total costs (production, installation in the first year, and yearly operation and maintenance costs) incurred
under drip irrigation at different discount rates. They are calculated over the ten year useful life of the
system. At a 2% discount rate, the BCR for drip irrigation was 1.74, its highest level, which declined at
4%, 6%, and 8% discount rates to 1.69, 1.63, and 1.58, respectively. The IRR was found to be 36%. The
rule of thumb for embarking on a project or making an investment is that the IRR should exceed the
discount rate. Thus, the results illustrate that drip irrigation is a viable project/investment in district
Faisalabad.
[15]
Table 11: BCR, NPV, and IRR (Per Acre) for Drip Irrigation at Different Discount Rates
2% 4% 6% 8% IRR
District
BCR NPV (Rs.) BCR NPV (Rs.) BCR NPV (Rs.) BCR NPV (Rs.) (%)
Faisalabad 1.74 269,552.57 1.69 227,956.87 1.63 192,874.20 1.58 163,137.26 36%

Table 12 shows per acre BCR, NPV, and IRR for wheat crop from data collected at the
experimental sites under perforated pipe irrigation. The BCRs and NPVs are calculated over the three year
useful life of the system. It is evident from the table that across all discount rates, the BCR was the highest
for district Chiniot and the lowest for the district Faisalabad. Likewise, NPV was also highest for Chiniot
district and lowest for district Faisalabad. District Hafizabad was in the middle for both BCR and NPV.
With regards to IRR, again district Chiniot was the highest with a positive IRR of 277%, with district
Faisalabad again at the bottom, and Hafizabad in between them.

Table 12: BCR, NPV, and IRR (Per Acre) for Perforated Pipe Irrigation at Different Discount Rates
2% 4% 6% 8%
Districts NPV IRR (%)
BCR BCR NPV (Rs.) BCR NPV (Rs.) BCR NPV (Rs.)
(Rs.)
Faisalabad 1.90 78,616.82 1.88 73,576.70 1.87 68,940.02 1.85 64,667.24 187%
Chiniot 2.40 121,273.67 2.39 113,834.98 2.37 106,985.78 2.35 100,668.55 277%
Hafizabad 2.22 87,589.42 2.20 82,014.69 2.18 76,885.46 2.16 72,158.13 197%

Comparing results across the two tables, while the BCR for drip irrigation show that it is a good
investment, it is the lowest BCR across all project sites and discount rates. This is due to the fact that drip
irrigation is significantly more expensive than perforated pipe. Though it has the second highest yields, and
higher yields than perforated pipe in Faisalabad, the returns to perforated pipe in Chiniot were in fact
slightly higher, with a significantly cheaper system.

CONCLUSIONS AND RECOMMENDATIONS

This study investigated the causes of low water productivity and aims to demonstrate feasible and efficient
irrigation techniques for its improvement. To investigate improving water productivity, the study was
executed in three phases. In the first phase, a comprehensive questionnaire was developed for farmers in
three cropping zones, rice-wheat (Hafizabad), mixed (Chiniot), and cotton-wheat (Samundri) for
identifying the factors affecting crop water productivity. In the second phase, field experiments were
performed at the three sites to demonstrate various irrigation techniques to improve wheat water
productivity. In the third phase, economic analysis was carried out to assess the viability of the irrigation
techniques. The following are the salient conclusions drawn from the study:

Field Survey
 Broken down by the three areas in the study, the following are the issues affecting water
productivity ranked in order:
o As reported from the Samundri area: canal water shortages, poor groundwater quality,
fertilizer, seed, energy, financial constraints, and low soil fertility.
o As reported from the Chiniot area: canal water shortages, energy, fertilizer, financial
constraints, lack of farm machinery, low quality seed, and soil fertility.
o As reported from the Hafizabad area: energy, fertilizer, canal water shortages, financial
constraints, seed and low soil fertility.

[16]
Field Experiments
 Drip irrigation, perforated pipe irrigation, and conventional irrigation practices gave field
irrigation efficiencies of 98%, 76%, and 59%, respectively, for wheat at the Samundri site.
 Overall, the perforated pipe system showed field irrigation efficiencies in the range of 72% to
82%, which was about 15% more than that of conventional irrigation methods.
 Drip irrigation, perforated pipe irrigation, and conventional irrigation produced water
productivities of 2.26, 1.46, and 0.90 kg m-3, respectively, for wheat at the Samundri site.
 Overall, perforated pipe irrigation and conventional irrigation produced water productivities in the
range of 1.36 to 1.72 kg m-3, and 0.90 to 1.14 kg m-3, respectively.
 Gross margin for the drip irrigation system was Rs. 36,832.84, higher than perforated pipe in the
same area, and also shows very respectable IRR of 36% in district Faisalabad.
 For perforated pipe irrigation, gross margins were superior compared to conventional irrigation in
the first year of production in all districts. The highest gross margin of all systems was in
perforated pipe in Chiniot. For the whole useful life of perforated pipe, the BCR ranged from 1.88
to 2.39 at a 4% discount rate, depending on site conditions, and was found to be profitable at all
discount rates in all the districts. The IRRs were 187%, 277%, and 197% in districts Faisalabad,
Chiniot, and Hafizabad, respectively.

Policy Recommendations
There are many ways to improve crop water productivity and field irrigation efficiency, however, solutions
need to be site specific. Every method is not viable at every farm. There is a need to develop technology
packages for each zone based on its characteristics such as soil type, topography, crops grown, water source
and its quality, and, above all, skill and commitment of the farmers. Following are the proposed policy
recommendations based on the field survey, field experiments, and observations to promote adoption of
HEIS for improving water productivity and farm income:

1. Drip irrigation is the most efficient, but at the same time, it is an expensive option. It also requires
more technical knowledge and intensive training for successful operation. In this scenario at hand,
there is a need for cheap and easy to operate interventions which still ensure improvements in
irrigation efficiency. Perforated pipe irrigation provides an option to convey water with 100%
efficiency from the source to the field along with improving irrigation efficiency because of
enhanced water supplies at the field outlet.
2. To minimize use of conventional methods, perforated pipe irrigation needs to be promoted by
making it available in markets and made of durable material. As well, workshops should be set up
to demonstrate its use in the fields.
3. Currently, there is lack of technically viable HEIS design. There is an urgent need for such
systems from the technical professionals who are not directly involved in the sale of the system
(i.e. third party design or farmer friendly design).
4. Prior to installation of HEIS, farmers need to be properly trained on the system. Farmers will be
the actual operator/user of the system and must understand its proper use.
5. Currently, little support is available to farmers for operating and maintaining HEIS systems.
Service centers need to be established at the local level to provide spare parts, as well as services,
for successful system operation.
6. Indigenization of the system and its components should be encouraged.
7. Initially the system needs to be installed at small scale, two to five acres, for the farmer to learn
and understand how to operate the system and to show its economic value. If the farmer
understands the system fully, and is convinced of its feasibility, then they should increase the
acreages under the system.
8. Based on size of land holdings, cropping zone, cropping pattern, product demand, water
availability and its quality, socio-economic conditions, different packages, in addition to HEIS, for

[17]
 improving water productivity and irrigation efficiency need to be developed for guiding farmers,
e.g. bed planting, precision land leveling, and narrow borders.
9. Institutional support is required for building the capacity of manufacturers, suppliers, installers,
local technicians, service providers, and farmers within the HEIS market.
10. Irrigation scheduling, along with fertigation schemes, for different crops under different efficient
irrigation systems are not available and need to be developed based on research data to help
decrease the cost of inputs and increase their efficiency.
11. For sustainability of the soil and water system, salts built up during application of HEIS must be
flushed and farmers must be taught the best practices to do so.

[18]
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